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When Bill Clinton ran for the Presidency in 1992, his platform was basically, it?s the economy ?Stupid?. When we look at the state of the American automobile industry, we believe both companies are on the wrong track. General Motors stock bottomed at $17 per share, and is now trading in the $30?s. Everybody is excited about chopping employees, closing plants, and potentially hooking up with Renault?s formidable Carlos Ghosn. This is all financial engineering, which is great for what it is, but it?s not what car manufacturing is all about. It?s all about cars, does anybody remember that GM, and Ford make cars.

What gets you into trouble is what has to get you out of trouble. The 25 year problem with American car companies, is that we manufacture cars that are less than desirable. Is anybody listening out there? If you look at sales patterns on the East coast, and West coast of the United States, you will see that Japanese manufacturers dominate both coasts in sales. The car companies are selling to long-time loyal Americans that buy American in the Midwest and Southeast. They are not selling on the basis of quality, and bang for the buck. They can?t compete on that level.

The problem comes down to this. The Japanese companies have mastered zero defect manufacturing. This means the car comes off the assembly line perfect. There are no (zero) problems to be fixed at the dealer level. When a person takes delivery from the showroom, he rides out with a car that doesn?t have to come back until the first major service. The reason why so many Japanese companies have instituted free oil changes on their vehicles is because the cars run like toasters. They run for tens of thousands of miles with nothing going wrong. People were not even changing their oil, so if most cars were leased, the companies had to make sure that at least the oil got changed. Cars are designed for the first buyer, to have zero problems, and the Japanese have mastered this.

Contrast this management decision with Detroit?s way of thinking. The cars go into the showrooms with defects. Detroit has made a conscious decision to fix these problems after the customer takes delivery. The customer will then bring the car back with a list of problems, and fix it at the dealer level. There is no comparison between consumer satisfaction with domestic cars, versus Japanese cars.

The Chairman of General Motors is a throwback to an age that no longer exists. Einstein said, ?We can?t solve problems by using the same kind of thinking we used when we created them.? This is what we are experiencing at GM, and Ford. William Clay Ford Junior, the current Chairman of Ford has done restructuring after restructuring to no avail. Ford is still losing market share. What about market share, Bill?

Every time GM loses a point of market share, they create for themselves an additional $1.4 billion in pretax losses. Our work shows that the automobile industry may be sliding into recession in 2007, and then where is this industry going to find itself? Let?s take a look.

Last year in 2005 if you look at GM?s automobile operations as a standalone business, they went through almost $7 billion dollars. This year aside from restructuring costs, we think they burn another $4 billion, plus $4.5 billion in 2007. The announced restructuring only amounts to $4.5 billion in savings. They are still bleeding, they are still losing market share. Over the next couple of years, you have to add upwards of $900 per car for raw materials, and costs imposed by Washington regulators, and GM isn?t alone. Ford will burn through $4 billion this year, and almost $4.5 billion next year in 2007. How do these guys keep their jobs?

For GM we can?t see where what they save from restructurings which is $4.5 billion in cash can offset the cash burn rate they have created. Read more…

You open the curtains, look out, and blocking your view is a shiny new Pontiac G6 or otherwise expensive car sitting in your neighbor’s drive. You wonder where your neighbors get the money to buy a new car every year or so. Well, they could be automobile leasing.

What is automotive leasing?

With automobile leasing you pay for the use of the car not for the car itself, ie: you never actually own the car, and it stays the property of the leasing company. Monthly lease payments are based on the estimated cost of the vehicle?s depreciation over the period covered by the lease. For instance, suppose you lease a car valued at $20,000. Over the course of a three-year lease term, the car may depreciate in value to $10,500. This depreciated value, or residual value, is subtracted from the car?s initial value. The difference between the two values, in this case $9,500, is what you will be paying for the duration of the lease. Leases typically last for two four years, with leases on high-end vehicles and luxury cars sometimes stretching up to five years. When your lease expires, you have the option of either buying the vehicle or moving on to a new lease, and most leasing companies give you the option of upgrading your car at the expiration of your lease.

What are the benefits and drawbacks of leasing?

Monthly lease payments are generally lower than monthly loan payments on the same vehicle, assuming that the lease and the loan have the same duration. Leasing lets you drive a new vehicle every few years depending on the length of your lease. Additionally, leasing allows you to drive a more expensive and feature-packed vehicle for the same monthly payment you?d be making to buy a lower-priced model. Your leased vehicle comes with a warranty while it?s in your use. Furthermore, automobile leasing saves you the trouble of selling your used car or Read more…

I have always wanted to be rich. I want to live a life filled with luxuries. I want to be the envy of others. In my opinion, wealth is something that could buy a lot of things. Money can bring you happiness. However, I do not deny that there are many things that money cannot buy. In fact, I believe that there are other more important things in life than money.

I am born into a middle class family. My family is neither poor nor rich. We are able to afford basic necessities and some luxuries. Also, I am blessed with parents who care a lot for me. They work hard to provide for me and my brother. My brother and I are able to lead a carefree life. I am thankful for all that I have. However, I do not deny that I want more. I want to be truly rich. I want to be able to afford everything that I want.

Being rich can make my life more comfortable. I will be able to buy a big house with servants. I will be able to afford luxurious cars with chauffeurs. I will be able to dine in expensive restaurants. I will be able to afford a private jet in which I can visit all the beautiful countries. Pretty girls will flock to me. I will be able to enjoy relaxing spas. People will look up to me. I believe that money will make me a happier person. I may sound superficial. But these are things that truly only the rich can afford and I to be the rich. If you were given a billion dollars right now, I am sure that you will be a happier person.

I believe that money can buy many luxuries. However, I feel that health is still the most important. I would rather be healthy than Read more…

Money?based on my observations over the years I have learned that it pays dividends when considering large purchases like cars, homes, education and the like, to get your facts and financing together first. Nothing can be worse than purchasing large ticket items while you are carried away on an overwhelming whirlwind of emotion, which often accompanies these big-ticket purchases. The best way to minimize purchasing mistakes and errors in judgement is to get your financing together first. Let?s take a quick look at a few of these purchases and how they can be best approached.

Buying a home-if you are planning on buying or refinancing a home take the time to learn about the details about various loan programs on the market by talking to several lenders including both banks and mortgage brokers. There are a wide variety of conventional and governmental home loan programs (including FHA and VA loans) that may be more tailored to your short, medium and long range needs.

One of the best things you can do is ask a bank for a free HUD booklet, which explains the fundamentals of home loans and how they impact you. Learn the ?financial speak? and don?t sign ANYTHING unless you (really) know what you are doing. Always be sure to talk to at least three loan officers and take notes, read loan literature, get pre-qualified for financing and understand exactly what you are doing BEFORE you look at homes. Doing so makes you a smarter buyer and less likely to make mistakes.

Buying a car-it doesn?t make any sense to me to buy a new car and lose thousands of dollars within minutes by driving it off the car lot. It makes more financial sense to buy a nice pre-owned car at a far less price? of course, you want to have it professionally inspected by a third party (licensed mechanic) before you buy it. And the key is the time of year you buy the car. In my opinion the best time of the year to buy a car is January or February of each New Year. Here?s why: A used car may be selling for $10,0000.00 on December 31 of a given year but on January 1 (the next day/the new year) it will not be worth as much as the day before because of the calendar change (.) Used cars tend to sell slower during this period of the year and your negotiating strength is highest. I like to think of this strategy as being ?prudent? not ?cheap?.

Buying education-colleges are in the business of selling education. They have classes to fill and representatives to help steer students into those classes. Many people who go to school seem to ?follow the follower? by chasing trends. Remember the ?rush? to get a computer programming degree during the 80?s? Everybody ran off to be a programmer only to find out (after they graduated) that much of the employment demand had been filled by the glut of computer graduates. Trends are like that? by the time you hear about a ?hot job market? and run off to get educated for it, the market is filled. Read more…

Breakdown in the Becky Lane!

I’d just sat down at my office away from home, the local Panera, when another regular customer, Harold, sidled up to my table. We’d chatted a number of times before, and he was intrigued by my title of Financial Sanity Coach and knew I had been working on my book, “Good Debt, Bad Debt” (Penguin-Portfolio,Jan. 2005) at this very table for the past year. Today he sought my advice on a weighty matter.

?Jon, I am thinking of buying a car for my daughter,? Harold confessed. I didn’t need to hear any more to know what was coming next. And when I did hear the whole story, I didn’t know whether to feel sorrier for the daughter or the father. Apparently, Becky had been working for three years and had succeeded in saving an amount roughly equal to one eighth of the tip I’d left at the counter. Now Dad was about to reward her excellent saving behavior by buying her a car.

Unbeknownst to Harold, he was about to initiate a life-long process that Stanley and Danko, authors of The Millionaire Next Door, call ?economic outpatient care.? There’s only one cure, as I advocate in my own book, Good Debt, Bad Debt : crimp the cash flow, now. If this sounds like ?tough love,? it is, and for good reason: kids who can’t save a good chunk of their income are destined to become financially challenged when they finally do leave the nest.

Sadly, even with a big jump in salary, most young people continue to spend like they did when their parents were footing everything, from essentials to lifestyle extras. Their ?metabolic spending set points? work against them when its time for them to pay ALL their expenses.

To explain the problem, I gave Harold the following example: ?If you’re living at home and make $200 a week and spend it all, there are no immediate consequences. Suppose you spend all $200 on going to the mall, eating out, concerts and clothes? No problem. Mom and dad cover the serious stuff. But once you start living independently, even if your salary starts at $1,000 a week, there’s a problem with spending $200 a week on fluff. For starters, taxes are higher; total housing expenses will be about 36 percent of salary and has, for 23 years kept pace with income. Suppose housing expense (rent/mortgage/utilities/taxes) chew up 36 percent, taxes take 28 percent, and your lifestyle choices cost 20 percent of salary. This leaves less than 14 percent of income for everything else: food, transportation, retirement, etc. That aint much?.?

Harold nodded as I went through my example. I could see by his body language that this was a painful topic for him. ?Hey, it’s natural to want to do nice things for your kids,? I said to assuage his guilt a bit. ?The problem is finding a way we can give that doesn’t cripple the ambition and thinking of the recipient.?

I also explained the plan I’ve been using in my own home. Here’s how it works. My wife and I allow our kids to spend only 50 percent (40 net) of the money they get from small jobs and gifts; the other 50 percent must be saved. When my 13 year old son had a job helping a neighbor insert ads for a commercial paper route, he was earning $20 a week. He would bank $10, tithe $2, and use the remaining $8 for games, books, or special treats. Several times when he wanted a $40 Nintendo game, he understood it could take five weeks to save the money. Often, he would strive to come up with special jobs around the house to earn the money faster. This plan seems to work pretty well — it provides enough cash to generate some immediate benefits, while enabling my son to experience the pleasure of watching his savings Read more…

You have come to the end of your auto lease and you enjoy you automobile enough you want to buy it. However, you must do some research in order to get a great deal.

To begin with, you should find out the cost of buying out your lease. Read the fine print of your contract and try to find the ?purchase option price?.

The price is established by the leasing company and typically includes the residual value of the car at the end of the lease as well as a purchase-option fee ($300 to $500).

When you signed the contract, your monthly payments were calculated as the difference between the car?s price and its expected value at the end of the lease, and also a monthly financing fee.

This estimated price of the vehicle value at the end of the lease is called residual value. It is the loss in value of the car over the lease period. For instance, a car which costs $40,000 and a 50% residual percentage will have an estimated $20,000 value the end of the lease.

Once you know this, you must find out the actual value, also called market value, of your car. In other words, how much does your vehicle retail for in the market? To identify a good, reliable estimate you should carry out some pricing research.

Check the price of the car, with similar Read more…

It could happen to anyone at anytime and with more cars on the road than ever before an auto accident can be both devastating and cause unnecessary stress to all involved. One of the last things you want at that time is a problem with your medical insurance coverage.

Anyone could be involved in a car accident at any time, driving safely is no guarantee as an accident is just as likely to be the other drivers fault. Even if you were not responsible for an accident the medical bills are likely to be enormous and the more serious the accident the higher your medical costs are likely to be. Trying to pay them without the protection offered by insurance would be difficult for most people and one that with a little forward planning can be avoided.

It can be difficult to determine just what is covered by your policy and to be honest for most people they are more interested in securing the policy than the finer details.One option to consider is an auto insurance policy with inclusive medical coverage because if your auto insurance policy has medical coverage included this ensures that you are covered for any injury that results from a car accident.

An additional benefit of Affordable Auto Insurance policies with inclusive medical coverage is that they may also cover injuries sustained from accidents affecting you as a pedestrian. It is also common practice that auto insurance policies would include including medical protection for any passengers in your vehicle at the time of an accident. Just think of the possible medical expenses if your car is involved in accident, even more so if there are 3 passengers with you at the time, it is comforting to know that your medical expenses plus those of your passengers will be covered by your auto insurance policy.

Blame doesn’t come into it because regardless of who is at fault if you are involved in any type of accident where you have medical expenses due to the accident, those expenses will be covered. Medical expenses can be considerable as they may include everything from ambulance transportation, x-rays, surgery and extended hospital stays. Regardless of your injuries you can rest assured that you will not have to worry about them at the time of the accident.

It should also be remembered that medical care and the costs involved may well carry on after being discharged from hospital, you may require long term medical care and your insurance cover can help with the Read more…

There are DOZENS of insurance claim possibilities which will increase the dollars awarded you in the settlement of your personal injury insurance claim. Some of them rarely see the light of day but some do. The six I?ve listed below are crucial for you to be aware of as you prepare to go to war with Adjuster Henry Hard-Nose regarding the value of your loss. They are:

(1) EMOTIONAL REACTIONS TO YOUR INJURY: When it comes to placing a dollar value on the ?Emotional Reaction? of an injury one enters into an area where most individuals, even experienced claims adjuster?s and Legal Beagles, are at a loss.

Four often ignored ?Characteristic Symptoms? can be: Confusion, Anxiety, Depression and Denial. (?Denial?, that is, regarding the seriousness of your injury and the constant pain you feel. This usually comes to pass when one refuses to complain anything is seriously wrong, convincing themselves it will work itself out).

If any of the above ?Emotional Reactions? (which are a direct result of ?Characteristic Symptoms?) becomes a reality it would be wise for you to see a shrink. Maybe you won?t immediately identify this as something you need to have checked out but the person you climb into bed with probably will. When she tells you you?re not functioning (between your ears) all that well, listen up! If that?s what you?re told you should swallow hard and obtain an expert?s opinion. You may consider yourself a muscular “Power To Be Reckoned With” but you?re not Superman so, talk to a specialist, explain what?s happening, and let it all hang out.

Once you?ve been discharged, get that specialist?s written Medical Report and hand it to Hard-Nose, along with the medical bills for your treatment. Is that legit? The answer is absolutely, yes! Can he refuse to accept them and suggest they add no value to your claim? The answer is absolutely, no!

(2) EMOTIONAL DISTRESS: Emotional distress is legitimate “Pain and Suffering” and you should be compensated for it. For example, problems that may develop over the effects of an accident within the area of your work or business, or perhaps interfere with your sex life! Whatever it is that?s causing you problems you should see a specialist. Keep going back to see him for as long as it takes to return to normal. At the end of his treatment, when he’s finally discharged you, ask for and obtain his written report. Present that to Adjuster Henry Hard-Nose along with the specialist?s bill for their services.

This is a legitimate expense and it positively gives your personal injury more value !

(3) SECURING COMPENSATION FOR LIFE DISRUPTIONS: If your injuries caused you to miss some special training you had arranged to take advantage of, you’ll probably, at some point, want to make that time up. The difficulty you may experience in making up that missed time (or perhaps never again being able to obtain it) has the potential to increase the value of your settlement. To achieve this you must obtain written proof and present it to Adjuster Hard-Nose.

Also to be taken into consideration is a vacation you may have been unable to take, or some recreational event?s in which you could not participate in and/or a missed special event, like a wedding or a reunion, etc. All of these, properly documented, add value to your claim because they are specific examples of the inconvenience and discomfort you’ve endured as a direct result of your injury.

(4) YOUR AGE: In the evaluation of an individuals “Pain and Suffering”, age is always a factor because the older you are the longer the periods of Total or Partial Disability will be. This will affect the course of treatment plus the length of time of the “pain killers” you?ve been ordered to take. For example: Over age 50 disability is about 10% to 15% longer, over age 60 disability is about 20% to 30% longer, over 70 disability can be 35% to 45% longer and over 75 disability can often be 50% and longer.

(5) PRE-EXISTING MEDICAL PROBLEMS: Also pre-existing conditions are factor?s that must be considered: For example: Arthritis, Sugar Diabetes, Pervious Injuries and/or Previous Operations that have left you with on-going problems, etc.

Whatever that pre-existing situation may be you should look to your attending physician for advice. Don’t avoid discussing this with him. If any doubt exists you should insist your doctor refer you to a specialist for consultation. If your physician Read more…

A couple months ago you were toolin’ on down the avenue, minding your own business, when out of nowhere, this fumbling, stumbling man by the name of Freddie Fuddle flew through a Stop Sign and plowed into you with a gigantic, rip-roaring, screeching broadside. You were wearing your seat belt but it was still a thundering crash that wrenched and whipped you around the inside of your motor vehicle something fierce!

Now, after a long recovery period, Fuddle?s carrier, Granite Mountain Insurance is clamoring to close the case and they’ve assigned Claims Adjuster I. M. Strong, to handle your case. You and Strong are sitting at your kitchen table talking about your settlement dollars. It turns out he?s got some hang-up?s regarding your lost income. Well, here are some things you need to know:

Lost wages are one of the most important element’s of your damages. Listen to me carefully when I say, “You should not think about the days you missed from work as Lost Time and Earnings. It’s not Lost Time and Earnings – - it?s Lost Earning Capacity?

You ask, ?What?s Lost Earning Capacity all about? I thought I could only collect for my Lost Income?? The answer to that is, ?In many situations you can claim lost income EVEN IF YOU HAVEN’T LOST ONE SINGLE PENNY ?. For example, this can happen when your salary is paid because you’ve elected to apply for the sick leave that?s due you, or because of an Accident and Health Policy available for you to take advantage of, or some other such arrangement.

In most instances – - even if you were paid while out of work – - you should still get that money routinely identified as Lost Wages. Why? Because that’s your Lost Earning Capacity. Your Lost Earning Capacity is what?s called a Compensatory Damage. Don’t let Strong swindle you out of that Compensatory Damage. Even if you?ve received an income, in some other way, you’re still entitled to it. Strong will do everything he can to take advantage of you, especially when it comes to getting paid for your Lost Earning Capacity. During the course of every settlement negotiation he gets involved in, he?ll try that tactic on for size, and it?s mind-boggling how often he gets away with it.

The typical statement made at that point, by the unsuspecting claimant is, ?Hey, I understand I?m to be paid for my lost wages.?

Strong answers, ?You collected $200.00 a week from your Accident and Health Policy didn?t you??

?Yeah, but my average weekly income last year was $275.00 a week.?

?Okay?, I. M. Strong flashes a well practiced, winning smile, that tells you he?s a fair insurance claim adjuster, when in his black heart, he knows he isn?t, ?We?ll pay you that $75.00 a week difference. Let?s see, you were laid up and unable to work for 5 weeks. 5 times $75.00 is $375.00. Don?t worry my friend, I?ll see to it you?re paid that $375.00.?

?Wow!? you think, ?that?s terrific !.? You?re thrilled to death with this great turn of events.But what you don?t know is that the $200.00 a week you?ve received from your Accident and Health Policy has absolutely nothing to do with your lost income.The bottom line is that Smart has just cheated you out of a thousand dollars! And, worse than that, the $275.00 a week income you lost (for a total of $1,375.00) would have (in a court of law) given your case $4,000.00 to $5,000.00 more value in settlement dollars.

DOCUMENTING LOST INCOME: Ask the company you work for to write a letter on their official stationary declaring your gross salary income and the days you lost from work.

GROSS PAY VS. NET PAY: You should collect the “gross” wage’s you lost, not the “net”.

TOTAL DISABILITY and/or PARTIAL DISABILITY: For every week of Total Disability (a fact which must be stated in your doctors Final Medical Report) you should use your gross weekly income – - even if you were paid! (For every week of Partial Disability your doctor states in that Final Medical Report, you have the right to claim a substantial percentage of your income, during that period, even if you didn’t lose any).

Because the following five points give value to your claim be ready to Read more…

While Legal Romantics would like to characterize the trial of a lawsuit as a ?Search For Truth? that?s not a reality!

Cases are decided on the evidence. When reviewing cases before them, judges invariably use the phrase, ?The evidence shows?, rather than, ?The truth of the matter is?. That first phrase is a reality that filters from the courtroom down to the objective evaluation of each case tried.

If Fred Fuddle is the town drunk, or if his conduct at the accident scene was provably abnormal than the value of your case should increase. If your injuries are visible and/or demonstrable, it?s likely your settlement will be larger. The conduct of both Fuddle and you before the accident may be significant. If you had been at a bar drinking heavily or raising holy hell out on the highway before the accident, you?ll get less regard from the jury than if you were driving to your house of worship with your family.

So, the circumstances of your behavior before, during, or after the accident increases or decreases the value of your settlement.

THE SIX MOST IMPORTANT ELEMENTS IN THE ?EVALUATION PROCESS?: To be fully informed, you must know and understand the six primary evaluation elements that figure into the process of evaluation. They are as follows:

(1) THE FACTS (2) THE EVIDENCE (3) THE LAW (4) YOUR INJURY (5) SPECIAL DAMAGES (6) THE INTANGIBILITIES.

(1) THE FACTS: The gathering of the provable factual information is the first step in the evaluation. If you try to evaluate a claim without as complete a file of facts as possible, it?s like going hunting for a lion with a slingshot.

(2) THE EVIDENCE: You must weigh all factual evidence known to you against the actual evidence you can produce to substantiate it. No matter what information you?re aware of, your position will always be stronger if you have the evidence to back you up.

For example: You can talk until the cows come home about the unsightly black-and-blue marks you had on your face, ribs, and hips, the scar on your forehead, or the 75 feet of skid marks Fred Fuddle?s auto left on the highway before he smashed into you, but Adjuster I. M. Smart will never adequately comprehend, (nor want to believe you) unless you provide him with photographs.

Providing Smart with the proof-positive of photographs will cause his Supervisor?s eyes to bulge as he inhales a deep breath of resignation and declares, ?Hey, this one?s gonna cost us? .

QUESTION: ?How can Dan be so sure about that?? ANSWER: ?Because before Dan retired, after spending over 30 years on that firing line, he was an Insurance Adjuster, Supervisor, Manager and Trial Assistant. He?s been there, saw that, plus heard (and felt) that many thousands of times?!

Whenever possible you must help Adjuster I. M. Smart justify the settlement figure he wants to get approved by his immediate superior at Granite Mountian Insurance Corporation.

(3) THE LAW: As proved in over 83% of the accidents in the United States in 2003 the impact you were subjected to is clearly the fault of ?Fumbling? Fred Fuddle, so the law is on your side.

Armed with the information found in my third book AUTO ACCIDENT PERSONAL INJURY (How To Evaluate And Settle Your Loss) plus THE BASE FORMULA (The Baldyga Auto Accident Settlement Evaluation Formula) you?ll be able to do that. THE BASE FORMULA will correctly evaluate your ?Pain and Suffering?. Because of this, you can settle your own claim without handing a huge percentage to an attorney. A lawyer who has done nothing more than have his secretary send Fuddle a letter of representation and then think it?s perfectly acceptable (after many moths, sometimes years, of hiding/stumbling/fumbling and verbally pitching his well-practiced answer when you asked, ?Hey what?s Read more…